How do I import a Second -Life Avitar (XML file) into Blender?
As you said the Wiz Daxter addon is perfect for the importation of secondlife XML file.

If you have trouble for the installation here are some advice:

First this addon work only for 32 bits version of blender.

After downloading the Wiz Daxter addon, the 1.0.9 version, extract it in you blender folder. In my case it's :

C:\Program Files (x86)\Blender Foundation\Blender\2.71\scripts\addons

/!\ Put only the SLAV folder and not Blender263_SLAV_109 in your addon folder!

Now you can enable your addon in the user-preferences that you can acces with ctrl+alt+u.

Then the addon is in the Impot-Export Section and its name is Import Secondlif Mesh and Skeleton.